June 04, 2006
Barclays steps up fraud war
Barclays steps up fraud war
A range of tools is key to bank’s plans to offer greater protection for online customers
Daniel Thomas, Computing 01 Jun 2006
Barclays has unveiled plans for a range of anti-fraud measures over the next 12 months to protect online banking customers.
The bank told Computing it will introduce a variety of methods to authenticate internet users, including card readers and mobile phone verification.
The aim is to offer different devices depending on customer needs, says Barclays director of electronic banking Barnaby Davis.
‘Everyone is trying to find a one-solution-fits-all method, but I don’t think that is how the internet will move,’ he said.
‘We are looking at a split service. There might be a one-time passcode for smaller payments, but if you move large amounts of money around you may want to use a card-based solution.’
The plans build on last week’s announcement that Barclays has become the first UK bank to offer free anti-virus software, supplied by F-Secure, to all 1.6 million active online customers, as well as a text messaging service to alert customers to suspicious transactions.
The text service, already used by Barclays’ ABSA bank in South Africa, will notify customers when a third-party payment is set up using their online account.
The bank plans to extend this service and use it as an anti-phishing technology, to issue an extra one-time password and notify customers if someone tries to log in to their internet account.
‘They will know as soon as someone tries to make a payment and can stop them. We also see the SMS notification service developing to include an element of authentication,’ said Davis.
Barclays also expects to start issuing a payment card-reading device to high-use internet customers next year, to authenticate transactions made via the internet or telephone.
The interoperable card reader developed by banking industry body Apacs aims to cut card-not-present fraud, which grew by 21 per cent last year, costing UK banks £183.2m.
‘Early alert systems of any type that notify banking customers are a good idea,’ said Sandra Quinn, director of corporate communications for Apacs.
‘Over the next 18 months to two years we will see banks offering a variety of things to further cut fraud.’
What do you think? Email us at: feedback@computing.co.uk
June 4, 2006 at 08:19 PM in Financial Services | Permalink
| Top of page
| Blog Home
Banks Give a Shout-Out to Gen Y: Young Adults Have Own Expectations, and Banks Are Rushing to Meet Them
RedOrbit - Technology - Banks Give a Shout-Out to Gen Y: Young Adults Have Own Expectations, and Banks Are Rushing to Meet Them
By Ieva M. Augstums, The Dallas Morning News
Jun. 4--Graphic
Steven Rose represents banking's future profits.
Yet, like other members of the highly mobile Generation Y, he isn't easy to capture or to please. The 22-year-old went shopping for alternatives when his Arlington bank was acquired last fall.
"My parents wanted me to stay at the same place," said Mr. Rose, a senior biology major at the University of North Texas in Denton. "But I didn't really want to. They were busy all the time and didn't have what I needed."
After talking to some of his fraternity brothers, Mr. Rose took his money to Washington Mutual. "It seemed like a steal -- like they were paying me to bank with them," he said.
Although Gen Yers may not have much money now, banks and credit unions know that these 18- to 28-year-olds could one day be profitable for them if the financial institutions can persuade them to become loyal customers.
But members of this generation want free, fast and easy services outside of branch locations, and financial institutions are having to find new ways to entice them.
"They are a different breed. This is a group that has different expectations," said Steve Williams, a principal with Cornerstone Advisors Inc., a bank consulting firm in Scottsdale, Ariz.
"We look at Gen Y as probably the demographic group that is going to put the requirements over the top in bank services and delivery."
Members of Gen Y are among the heaviest Internet users, and many bank online.
When they visit a branch location -- traditionally where banks sell more lucrative products and advisory services -- it's usually for simple transactions.
So many banks are rolling out a wider assortment of online banking options to appeal to young customers.
"They shop online, they do their research online, they're on the Internet," said Lisa Phillips, a senior analyst with eMarketer Inc., a market research firm. "Once they start banking online, they get to feel more secure and then they are more open to do other services online."
Eighty-two percent of 18- to 24-year-olds in the U.S. use the Internet, according to a recent Pew Internet & American Life Project study that looked at online usage by teens and adults in 2004 and 2005.
That figure increases to 85 percent with 25- to 29-year-olds.
Though Gen Yers are active online, they're cautious about banking online. Their Internet experience has exposed them to such dangers as identity theft, fraud and phishing scams, Ms. Phillips said.
As a result, banks go out of their way to assure these customers that their sites are safe and secure.
"Bank Web sites will have to have the right information on there in the right place in order to get this generation," said David Grove, Texas marketing director for North Carolina-based Wachovia Corp.
"Because the younger generation is more comfortable with technology, it's an easier sell."
Do it their way
To appeal to Gen Yers, banks also have to fit their lifestyles and make it easy to do business.
"They want to conduct business in their way, on their time," Mr. Grove said.
That means enhanced online services, text alerts and free stuff, not to mention the availability of a customer service phone line staffed 24 hours a day, seven days a week.
"Our focus has been around online bill pay and other ways to cater to their technology know-how," said Bridget Cooney, Dallas-area retail market manager for New York-based J.P. Morgan Chase & Co.
Chase customers can receive up to 17 kinds of alerts -- "overdrawn account" or "deposit posted" messages, for example -- that are transmitted via e-mail or text message on a cellphone.
Wachovia and several other banks and credit unions offer similar services locally. They sell their online capabilities as "state of the art" and "new and advanced."
Mr. Rose, the UNT student, said he goes to an ATM or online to bank and rarely visits a branch unless he has to make a deposit or cash a check.
"I just normally use my debit card," he said, adding that the closest branch to him in Denton is actually in Corinth -- about a 15-minute drive. "Normally, my dad and I check my balance online all the time -- that way I always know what I have."
In person or online
Young customers still visit branches to open accounts and use more complex services.
"Generation Y will likely still have some attraction to personal relationships," said Mr. Williams of Cornerstone Advisors. "Some of them may not be comfortable taking out a loan or getting a mortgage online."
But even that's changing.
About a month ago, Washington Mutual started a service to instantly open accounts online.
The process, which uses verification technology similar to that used by online credit rating sites, lets consumers open accounts anytime.
"Coupled with online banking and bill pay and free withdrawals at any ATM worldwide, customers who wish not to visit a bricks-and-mortar branch don't have to," said Brad Russell, spokesman for Seattle-based Washington Mutual Inc. "Convenience and cost savings, we believe, appeal to the 18- to 28-year-old consumer."
The key is to hook young people early, particularly in college, so that they will grow with the bank or credit union.
"It's a very important segment to us," said J.P. Morgan Chase spokesman Chris Spencer. "You never know what college student will be the next doctor or lawyer."
Financial institutions know that young people tend to stay with the same bank over the long term -- and ultimately can be sold profitable services such as mortgages and family financial planning.
A recent survey of college students and graduates by Synergistics Research Corp. showed that 69 percent of graduates kept their checking account with the same institution they used while in school.
When current students were asked whether their relationship with their bank was "only temporary," 60 percent disagreed and just 15 percent said they planned to switch.
That's why financial institutions are learning how to connect with Gen Y and pouring on the incentives.
Credit Union of Texas found that getting its message out to young people required a new approach, so it hired a local advertising agency this year to help.
"Like with any industry, it becomes competitive. This generation is mobile, on the go," said Karen Coffey, Credit Union of Texas' vice president of marketing. "We still do some print advertising, but we're doing more radio and online communications."
One bank is giving away a year's worth of 12 packs -- that's one 12-pack of a soft drink each month -- and another is linking college ID cards to bank debit cards.
San Francisco-based Wells Fargo & Co. provides campus ID/debit cards to students at 18 universities throughout the U.S., including several in Dallas-Fort Worth and elsewhere in Texas.
Students are able to use their cards not only on campus, but also with local merchants in many instances.
"It's a means to capture what we feel is a lifelong customer early in their decision process of who is going to be their financial institution and adviser through their life," said John Gavin, regional president for Wells Fargo.
Hire power
"Having the right people in our branches is also a plus," he said.
Banks are hiring students right out of college to step up the youth appeal, but industry experts say they could do more.
"I think it's a wake-up call in the sense that most of these tools that this generation wants to use aren't used by the bank employees," said Mr. Williams of Cornerstone, the consulting firm.
"The key is to hire -- and listen to -- young people."
E-mail iaugstums@dallasnews.com
-----
Copyright (c) 2006, The Dallas Morning News
Distributed by Knight Ridder/Tribune Business News.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
NYSE:WM, NYSE:WB, NYSE:JPM, NYSE:WFC,
Source: The Dallas Morning News
June 4, 2006 at 05:50 PM in Financial Services | Permalink
| Top of page
| Blog Home
